FTX and IRS reach settlement for approximately $885M

FTX debtors will pay the IRS $200M, with an outstanding lower priority claim of $685M

article-image

Kiran Jyothi VP/Shutterstock and Adobe modified by Blockworks

share

The FTX estate and the Internal Revenue Service proposed a settlement that would see the bankrupt exchange’s estate pay the government nearly $1 billion. 

The sum, which totals $885 million, is a far cry from the $24 billion originally sought by the IRS. 

As part of the proposed plan, the debtors will pay the IRS $200 million within 60 days of confirmation. The other $685 million will be paid “to the extent of funds available in accordance with the settlement.”

Meaning that the claim is on the lower priority list, and other claims will be paid out first. 

There’ll be a hearing on the motion held on June 25 before Judge John Dorsey, the judge overseeing the bankruptcy proceedings. 

The FTX debtors pushed back against the $24 billion claim by the government tax agency last December, warning that FTX — while operational — “never earned anything anywhere near amounts that could support the IRS claims for $24 billion in taxes.”

Read more: FTX bankruptcy almost across the finish line

And that number was actually cut in half by the agency itself, which originally alleged that it was owed nearly $44 billion in taxes. 

The proposed settlement clears yet another hurdle in FTX’s path to winding down its bankruptcy. 

Later this month, a hearing will be held to cover the estate’s proposed reorganization plan. 

The estate announced in early May that it cobbled together between $14.5 and $16 billion to pay back creditors. But the plan has drawn mixed reviews from critics.

Some creditors are unhappy that their claims will only be paid out according to November 2022 prices. An aspect of the plan that was challenged at the beginning of the year, though Judge Dorsey said that the code is “very clear.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

REPORT_Template.png

Research

The Sonic blockchain is leveraging redesigned airdrop incentives and its FeeM program to propel DeFi activity and attract institutional capital, setting the stage for ecosystem growth. Within this environment, leading protocols Shadow Exchange and Silo are poised to asymmetrically benefit due to innovative features and favorable valuations, despite facing ecosystem dependency and competitive pressures. This positions them as compelling, potentially shorter-term, investment opportunities contingent on Sonic's sustained success.

article-image

A group of Twitch streamers battle for bitcoin. Will their chats help them?

article-image

Tokens still suffer from a lack of transparency

article-image

Sponsored

The blockchain creates a fair environment where AI agents and users can access deep liquidity without MEV or other forms of value extraction

article-image

After upping its offer multiple times, Circle is finally trading on the NYSE

article-image

Circle goes public on the NYSE Thursday — here’s what to expect